(04.07 MC) Use the graph to answer the question that follows…

(04.07 MC) Use the graph to answer the question that follows.Assuming that the economy is initially in equilibrium at rate of interest, ‘R,’ and quantity of loanable funds, ‘Q.’ What will be the new rate of interest and quantity of loanable funds if the marginal propensity to save increases?

(04.01–04.07 HC) For all graphs, be sure to correctly and co…

(04.01–04.07 HC) For all graphs, be sure to correctly and completely label all axes and curves and use arrows to indicate the direction of any shifts.Assume that an economy is in a short-run macroeconomic equilibrium and experiences a positive demand shock. What will happen to real output and the price level as a result? Explain. Using a correctly labeled graph of the money market, illustrate the impact of the positive demand shock. What will happen to the price of previously issued bonds? Explain. What is one policy action that the central bank could take to offset the change in the nominal interest rate from part (b)? Assume a limited reserves system. Assume that the required reserve ratio is 10 percent. If the central bank wants to decrease the money supply by $60 billion, what is the specific open-market operation (type and minimum value) that the central bank needs to conduct?